Big tech gets caught up in the AI ​​frenzy

Today's top news

• The Fed will announce its decision on interest rates at 2pm ET/7pm London time. Click here for more details and reactions.

• New York City police raided the Columbia University campus and arrested pro-Palestinian protesters in an effort to quell riots that have spread to campuses across the country and fueled divisions in the United States over the war in Gaza.

• Maritime experts have warned that Yemen's Iran-backed Houthis are threatening commercial shipping in wide swaths of the Indian Ocean after ramming a container ship at sea far beyond the Red Sea last week. Many shipping companies have switched to longer shipping routes to avoid Houthi attacks on the Red Sea and the Gulf of Aden's access routes to the Suez Canal.

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Good evening.

Will artificial intelligence come to your job?

The FT today tested OpenAI's new Sora video generation model to assess its impact on jobs, after a big tech coverage season dominated by an arms race on AI spending.

The tests at Sora and rivals Runway and Pika are focused on the animation, advertising and real estate sectors that are likely to feel the power of new technology the most. The results are impressive, if not directly comparable to actual human-made materials, at least for now.

AI may still be in its relative infancy, but it's already dominating Big Tech's investment plans.

Amazon announced yesterday that demand for AI is driving strong revenue growth in its cloud computing division, and that it plans to spend heavily to support the technology. The company is vying for dominance in generative AI with cloud-computing rivals Microsoft and Google's parent Alphabet, accelerating spending on data centers and other infrastructure to support the technology.

Microsoft reported better-than-expected revenue and profits last week, and outlined that its cloud revenue and AI spending would rise as well. Analysts are closely monitoring the performance of 365 Copilot, a generative AI assistant integrated into a suite of productivity apps.

Like its rivals, Microsoft is racing to meet strong demand for cloud computing and AI while also meeting clean energy requirements. Today, the company agreed to support $10 billion in renewable power projects with Brookfield Asset Management, which will bring 105 gigawatts of generation capacity online, which will serve 1.8 million households. This is the same amount needed to power a sizable home.

Meanwhile, Alphabet, whose corporate value soared to more than $2 trillion after last week's results, said the Gemini era is now “well underway,” citing its generative AI large-scale language models. The company is also considering charging for certain AI-powered search features in its premium services, which already offer the Gemini AI assistant in Gmail and Docs.

Despite the technology being developed in-house by the company's own researchers, the company believes commercialization of generative AI is at a competitive disadvantage, especially in the context of Microsoft's $13 billion partnership with OpenAI and the ubiquitous ChatGPT program. It has been criticized for being slower.

At Meta, boss Mark Zuckerberg was forced last week to defend big spending aimed at turning the social media group into “the world's leading AI company.” Shareholders were not impressed, and the company's stock price plummeted.

However, technological development is progressing rapidly. Meta's recently released Llama-3, along with OpenAI's soon-to-be-released GPT-5, is already an important step toward the next frontier in AI: models capable of reasoning and planning, or superhuman cognition in machines. Testing.

Meanwhile, its frenetic activity has caught the attention of regulators.

The UK Competition and Markets Authority last week raised concerns about partnerships between Big Tech and AI startups. CMA is helping established companies take advantage of AI companies' insatiable demand for computing power to train large-scale language models and lure cash-strapped startups to their cloud services, giving them significant leverage. They are concerned that they are acquiring shares that could give them a lot of money. A nascent business.

The CMA is already investigating Microsoft's partnership with OpenAI, which has also attracted attention from antitrust authorities in the US and Europe.

What you need to know: The UK and European economies

British government promises a 'New Deal for working people' labor partyIt is said to be the biggest expansion of workers' rights in decades, but there is still a chance that it will be toned down ahead of the general election.

of NHS The UK will still have three years to fully recover from the pandemic, but a lack of investment in hospital buildings and medical equipment is holding it back, its chairman Richard Meddings told the Financial Times. He said the service was also in constant battle with “modern world behaviors” such as gambling and the consumption of ultra-processed foods.

Voters in England and Wales go to the polls tomorrow in local and mayoral elections. election. Here are the results to watch on Friday and their timing, from Inside Politics' Stephen Bush (here's his guide to overnight results for professional politics geeks). The issue of city council funding is an important topic.

of euro area economy The recovery in Germany, the region's largest economy, led to growth of 0.2% in the first quarter, beating expectations of a 0.3% growth rate, compared with a 0.5% contraction in the previous quarter. Separate data showed the eurozone's headline inflation rate held steady at 2.4% in April after falling for the first time in 17 months.

of european union Twenty years ago today, we expanded with 10 new members. These countries, which have experienced impressive growth, need to ensure they remain competitive as living standards catch up with their Western neighbors.

on the other hand, georgiaIn Switzerland, an EU candidate country, police brutally cracked down on pro-democracy demonstrators fighting with pro-Russian politicians.

What you need to know: The global economy

head of world bank warned rich countries not to ignore Africa at a time when wars in Ukraine and Gaza are straining development budgets.

Chief economic commentator Martin Wolff said: global poverty This policy may soon come to an end as the poorest countries struggle to cope with recent economic shocks. A significant replenishment of funding for the International Development Association is urgently needed, he argues.

food and drinks Companies including McDonald's, Nestlé and Coca-Cola said poorer U.S. customers could no longer absorb price increases even as wealthy consumers continued to spend.

factory activity in china The official Purchasing Managers' Index showed growth for the second consecutive month, led by higher output in high-tech manufacturing. However, industrial profit data released on Saturday raised doubts about the economy's momentum.

What you need to know: Business

Europe is “sleepwalking” and becoming dependent Russian fertilizerAs with gas, says the head of Yara, one of the largest producers of crop nutrients.

EU 'investigating 20 airlines that may be misleading' green washing It focuses on the argument that carbon emissions from flying can be offset by investing in environmental projects or using more sustainable jet fuel.

Europe's largest car manufacturer They are suffering from declining demand and rising interest rates that are driving consumers away. The electric vehicle market has its own problems. Elon Musk has shut down the division that runs Tesla's Supercharger business and laid off hundreds of staff.

CEO of EricssonThe Swedish telecoms equipment maker slammed overregulation, saying it was “driving Europe into irrelevance” and hurting the region's competitiveness.

Investors are starting to take an interest in prospects such as: President Trump 2.0. Wealth managers are diversifying across asset classes and geographies to make their portfolios “Trump-proof.”

world of work

Europeans have more time and Americans have more money. Which is better?columnist Simon Cooper Consider the core elements of work-life balance.

The Duke of Westminster's estate agency Grosvenor is making a big bet. flexible workspace Catering to the demands of London's West End. This joins other landlords and office professionals who are ramping up their flexible offerings to appeal to tenants who embrace more hybrid working arrangements.

What will happen to the new U.S. rule banning the use of non-compete clause How will the contract develop? Listen to the new Working It podcast.

good news

intermittent nature Renewable energy Energy sources such as solar and wind have proven to be a major hurdle in switching away from fossil fuels, but the International Energy Agency says this could soon be a problem of the past. The cost of storage batteries is expected to drop by up to 40 times. percent by 2030.